Brexit: is no deal still the default?

Inevitably, current media focus is on the five day debate and 11 December vote in the House of Commons (HofC). However, The legislative framework within which that debate is taking place is explored below, with a particular emphasis on 21 January 2019 as the next crucial milestone date in the process.

Exit day

The current debate is under s 13(1)(b) of the EU Withdrawal Act 2018, which requires a HofC resolution to approve the Withdrawal Agreement and Political Declaration ("WA"). If the HofC were to approve the deal, then the House of Lords ("HofL") would then be asked to "take note" of that resolution with a deadline of five HofL sitting days.

Following approval of the deal, s 13(1)(d) requires an Act of Parliament to contain provisions for the implementation of the WA. That Act would have to complete all stages (1st reading, 2 nd reading, committee, report, 3rd reading) in each House before 29 March 2019.

If the HofC rejects the deal, then:

A Minister of the Crown must within 21 days beginning with that rejection make a statement setting out how the government proposes to proceed in relation to further negotiation with the EU. That statement would then be voted on in a motion before the HofC within 7 HofC sitting days, and by the HofL within a further 7 HofL sitting days. Assuming the 11 December vote goes ahead, the deadline for the statement would be 1 January (the Act makes express provision for including or excluding recess days when calculating other periods, so for this purpose it seems that "21 days" means 21 days. From there, the HofC would have to vote within 7 HofC sitting days, and the HofL within 7 HofL sitting days

Alternatively, the Prime Minister could make a statement before the end of 21 January that no agreement can be reached. In that case, a Minister must, within 14 days, make a statement setting out how the government proposes to proceed. The HofC would have to vote on that statement within 7 HofC sitting days, and the HofL within 7 HofL sitting days

In either case if no agreement has been reached and approved by the end of 21 January, then a Minister must make a statement setting out how the government proposes to proceed. The HofC must vote on that statement within five HofC sitting days and the HofL within five HofL sitting days.

21 January is, therefore, a crucial milestone date. If no agreement has been reached and approved by that date, then the current legislative position is that the UK would leave the EU with no deal on 29 March 2019 (defined by s 20 of the EU Withdrawal Act as "exit day").

The EU commission has also indicated that if no agreement is in place by 21 January, then its focus will shift to "no deal" preparations.

Potential challenge to the WA

During the legislative process to date, the government has accepted several amendments from the European Research Group (ERG) and other pro-Brexit groups that have sought to embed the exit date in primary legislation. The express intention of those amendments has been to provide that, even if there is no deal, the UK will leave the EU on expiry of the Article 50 notice on 29 March.

ERG amendments have also sought to limit the government's room for manoeuvre in other crucial respects. For example, section 31(5) of the Taxation (Cross-Border Trade) Act 2018 precludes entering into any form of customs union with the EU without approval by an Act of Parliament. Section 31(5) would preclude the backstop arrangements in the WA unless overridden by a subsequent Act. The most obvious legislative opportunity would be the Act contemplated by section 13(1)(d) of the EU Withdrawal Act, but the point would have to be picked up in legislation to provide for outcomes other than the WA. On several occasions (including in relation to Dominic Grieve's amendment on Tuesday 4 December 2018) Jacob Rees-Mogg has emphasised that a motion does not (and cannot) trump primary legislation. To that extent, the various amendments successfully inserted by the ERG over the past year have laid potential traps and grounds for challenge, should the government seek to defer Brexit or to exit on the basis of any form of customs union.

Andrea Leadsom has (correctly) stated that the Grieve amendment does not in itself allow Parliament to block a "no deal" Brexit. Given the current state of primary legislation, that would require a further Act of Parliament.

Implications for legal advice

The government's three defeats on 4 December have clearly put wind in the sails of the Peoples' Vote campaign among others. However, "no deal" remains not only a credible outcome, but the default position under current law. Therefore, it is advisable for businesses to retain focus on "no deal" contingency planning.

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